MDB on Nostr: We got spot Bitcoin ETFs. That was a major milestone. But there’s still a flaw: ...
We got spot Bitcoin ETFs.
That was a major milestone.
But there’s still a flaw: cash redemptions.
Institutions can redeem ETF shares for dollars instead of actual bitcoin.
That means bitcoin can flow in and out of the ETF without touching the network, without buying or selling real BTC.
It opens the door to paper bitcoin: financial claims that dilute the real thing.
In-kind redemption closes that door.
It requires that ETF shares be exchanged for real bitcoin.
No shortcuts. No proxies.
Every redemption means actual BTC moves on-chain.
That ties ETF activity directly to the real market, aligns supply and demand, and reinforces price discovery based on truth, not IOUs.
The ETF is a bridge, but only in-kind redemptions ensure it connects to bitcoin’s real foundation.
Until then, we’re still letting legacy finance create illusions in a system built to end them.
How can we force this:
That was a major milestone.
But there’s still a flaw: cash redemptions.
Institutions can redeem ETF shares for dollars instead of actual bitcoin.
That means bitcoin can flow in and out of the ETF without touching the network, without buying or selling real BTC.
It opens the door to paper bitcoin: financial claims that dilute the real thing.
In-kind redemption closes that door.
It requires that ETF shares be exchanged for real bitcoin.
No shortcuts. No proxies.
Every redemption means actual BTC moves on-chain.
That ties ETF activity directly to the real market, aligns supply and demand, and reinforces price discovery based on truth, not IOUs.
The ETF is a bridge, but only in-kind redemptions ensure it connects to bitcoin’s real foundation.
Until then, we’re still letting legacy finance create illusions in a system built to end them.
How can we force this: